Amazon sellers who were forced to scramble for new carriers at the height of the holiday rush can use FedEx Ground again. The company lifted its restriction at 5 p.m. EST on Tuesday, about a month after imposing it on Dec. 16.
The ban hit merchants in Seller-Fulfilled Prime, a program that lets them choose any shipping provider and still carry the Prime label, provided the carrier meets Amazon’s delivery standards. Sellers who fall short eventually have to switch carriers or lose Prime status, which FreightWaves says can cost thousands or even millions of dollars in revenue. Prime members, of whom there are more than 100 million worldwide, buy far more than other shoppers.
In an email to sellers, Amazon said FedEx Ground and FedEx Home Delivery were now “consistently meeting” its on-time requirements, so it had to reinstate them. Amazon had said it “temporarily restricted” FedEx near the end of peak season because pickup and delivery targets were being missed. It does not comment on what criteria it uses to judge carriers.
What the delivery data showed
Consultancy ShipMatrix put FedEx’s on-time record across all its shipping lines at 95% for the 2019 peak season, which ran from Thanksgiving to New Year’s Eve. The figure for the 2018 peak was 97.6%. Express services did better than ground, ShipMatrix said, but ground volumes dwarfed express traffic.
Small loss for FedEx, bigger for sellers
FedEx had already ended its other ground and air freight services with Amazon in the US, so the lost Seller-Fulfilled Prime work mattered little. Matthew White, a strategist at iDrive Logistics, called it a “smaller key account”. FedEx, he said, “gains and loses a handful of these a month. It’s nothing to sweat over.”
Merchants gain most, since they can return to FedEx if they like. The timing of the original ban had caused real anxiety, because sellers using FedEx had to find other providers almost overnight during a critical stretch of the selling cycle.
White questioned how fair the episode was. In his view Amazon was on shaky antitrust ground by pushing businesses to other carriers just because they list on its site. “Amazon is not merely ending a contract with a carrier,” he said. “It is specifically stopping merchants from using their respective FedEx accounts solely because they are listing through Amazon.” He also doubted that FedEx had been underperforming in peak season, and said Amazon could not keep making that claim now that the rush is over.
Critics point out that Amazon Logistics, the company’s own delivery unit, does not hold sellers to the same requirements. They see this as part of a long-term plan to draw more merchants under Amazon’s fulfillment umbrella by leaving them few alternatives. CNBC reported that an Amazon spokesperson confirmed FedEx Ground and Home services were again meeting the on-time standard.
Sources
- Amazon lifts third-party seller ban on use of FedEx Ground
- Amazon Lifts Ban on FedEx Ground for its Sellers
